Every year we go through the task of completing our taxes. Some of us go to a tax preparer while others do it ourselves. I’m one of those that does it myself, usually. We haven’t had anything challenging or difficult to encourage me to pay someone else to do my taxes. Maybe next year will be different, who knows at this point.
No one I know seems to want to PAY state or federal taxes. It seems everyone I’ve heard talking about taxes is excited to be getting REFUNDS. Do you know what a tax refund means? It means that the government has been holding onto money you could have had in a savings account collecting interest, except the government doesn’t give you that interest. The government keeps it!
Yes, it’s great to get a check in the mail or a direct deposit into the bank account with a large sum. Really, the goal should be to balance out as evenly as possible with what you claim on your W-4 with your employer. This means you’re getting that money with every paycheck instead of one lump sum, no interest. The economics of it makes more sense to balance out as much as possible. Wouldn’t you find it a bigger blessing to have that money with each check throughout the year instead of one lump sum, no interest the following year?
With this in mind, what do you do with that refund when you get it? I hear many people that go out and buy big ticket items, go on trips, things of that nature. Why aren’t we paying off bills with it? Why aren’t we saving the money? These are great questions to ask yourself.
We received a refund that was actually larger than previous years. I think we’re doing something wrong on our W-4 (I’ll have to go check that). This money has gone to paying bills, what we normally would have used if we got it with each paycheck, as well as buying our son some new clothes because he seems to be outgrowing what he’s been wearing. Toddlers, they grow way too quickly!
What do you do with your tax refund?